Technology Moves to the Forefront in Cinema as Digital Overtakes Film

For the first time, 35mm film in 2012 became the minority cinema format after nearly 90,000 screens went digital worldwide at the end of last year. As a result, cinema has moved from what once was a technology-free zone to one driven by technology, according to the IHS Screen Digest Cinema Intelligence Service from information and analytics provider IHS (NYSE: IHS).

Just a scant six years ago, in 2007, digital cinema was virtually nonexistent with only 5,158 screens worldwide, compared to 107,832 35mm film screens. Starting in 2010, ISO-standard digital screens and 3-D screens began to take hold with 12,743 digital 2-D screens and 22,327 3-D screens. But compared to 82,105 35mm screens, digital was still in the minority.

Nonetheless, digital 2-D screens at the end of 2012 had increased to 43,796, with an additional 45,545 in 3-D—as well as 5,500 lower-end e-cinema systems in India—pushing 35mm screens to the minority with just 35,087 remaining, as shown in the attached figure .

“The first foray into digital technology in cinemas came with sound, and then indirectly with online ticketing, moving afterward onto cinema advertising, then digital cinema, digital 3-D and the use of social media,” said David Hancock, senior principal analyst for cinema at IHS. “Outside of the films themselves, the industry side of the film business is also dealing with issues such as high and variable frame rates (HFR and VFR), 4K image capture, digital archiving, object-based sound, electronic distribution and a wide range of other issues. Cinemas are now at the nexus of consumer and industrial technologies, and applications and cinema owners will continue to respond to this trend during the year ahead.”

Change is afootThis change in film format also meant that 35mm is no longer needed in volume for release prints and image capture, which indicates that the old film format more than likely will die out within three years. Fuji is already phasing out film for production purposes beginning in March, although some professionals still prefer film for the look it gives. Films now are distributed on hard drives, or by satellite or fiber directly to the cinema. The industry will continue to see some major developments in this space in 2013.

For image capture, about 70 percent of high-end films now are shot digitally, generating a huge amount of data for each production—between 2 terabytes and 10 TB a day, and anywhere between 100TB to 1 petabyte over the whole shoot. This data all needs to be stored, processed, secured and transported, creating an entirely new workflow for post-production, as well as a new infrastructure for supporting film productions.

HFR on the agendaThe issue of the moment has to be high frame rates. For “The Hobbit,” IHS Screen Digest estimates that approximately 1,200 screens around the world upgraded their technology to play the HFR version—somewhat less than originally envisioned but still a promising start overall.

The jury is still out on whether higher frame rates have any place in cinema, but director Peter Jackson’s move in pushing the technology boundaries forward underlines where the cinema industry is heading and how technology will impact the business in the future.

The second part of the Jackson franchise in 2013, as well as the run-up to “Avatar 2,” will ensure that high frame rates stay on the agenda.

Laser tagLaser illumination is also a live issue, potentially offering a low cost of ownership to exhibitors with a light source that can last 30,000 hours compared to an average 1,000 hours for traditional lamps. The technology has several hurdles to overcome, not least the issue of speckle and safety parameters. But a transition is likely to begin, starting with the largest and most profitable screens as well as giant screen theaters. The cost of this technology is currently prohibitive; further research and coordinated development is needed this year in order to offer an economically viable projector for the next generation of digital cinema.

Premium concessionsPremium cinema has been around for some time, but it suffered from focusing solely on comfort and extra snacks. Yet technology, too, is having an impact on this area. Exhibitors now have a palette of options to choose from that give the consumer an enhanced “Cinema Experience.” Here, HFR, 3-D, object-based sound, Imax, and 4-D are all possible options on top of the enhancements that can be achieved with better seating, mobile ticketing, in-theater dining and so on.

The home cinema environment is also moving forward—with lower-cost wide-screen TVs, cheaper and better surround sound systems, 3-D TV, online downloads at narrower windows, as well as video on demand (VoD). Even so, cinema—now with the armory to raise the bar—can maintain the gap between the home-viewing experience and a movie-going event.

Wider demographics soughtDigitized cinema delivery and projection also allows the exhibitor to program their cinemas more flexibly, as it means no expensive 35mm print is needed, allowing exhibitors to respond to the needs of a wider local demographic with more films. The emergence of alternative content or non-film programming, such as opera, ballet or theater, is widening cinema—viewing options while bringing older people back to the cinema.The number of events is growing every year. For instance, there were 121 events offered in U.K. cinemas in 2012, up from 109 in 2011 and only 44 in 2010, and further growth in this sector will occur during the years to come, IHS Screen Digest believes.

Cinema on Demand, often using social networking technology, is also taking its first steps as part of what the cinema exhibitor can do—offering groups of motivated customers the chance to influence directly the cinema program. Exhibitors will begin to experiment with the concept this year.

A shot in the armMovies in 3-D have provided a shot in the arm to the movie business for several years now, with “Avatar” at the very heart of this trend. As 3-D matures, audiences are also increasingly seeking out the best 3-D experiences, especially as the premium price needs to be justified in value on monetary terms.

Several new technologies are helping to elevate the 3-D experience in theaters to make it more desirable, notably higher-frame-rate 3-D, seen after the release of “The Hobbit.” This year the format will be more widely adopted across the globe as theaters decide to invest in advance of the second “Hobbit” movie and James Cameron’s HFR “Avatar” follow-up a year later. The development of laser-illuminated projectors as mentioned above, also enables much brighter 3-D presentation, something that audiences are demanding.

About IHS Screen Digest:Screen Digest is the pre-eminent firm of industry analysts covering global media markets including film, television, broadband media, mobile media, cinema, home entertainment, gaming, and advertising. In November 2010, Screen Digest Limited was acquired by US research company iSuppli Corporation who were subsequently acquired by IHS, one of the biggest providers of market research and insight globally. Together IHS Screen Digest and IHS iSuppli offer the most complete and insightful analysis of the global technology, media and telecommunications (TMT) sector.IHS Screen Digest Directory pageAbout IHS:

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,500 people in more than 30 countries around the world.